Superannuation For Casual Employees

If you’re a casual employee, then you may not be aware of the fact that you could be entitled to superannuation. Find out how much you need to earn to qualify and what to do if your employer isn’t paying you.

Regardless of your age or experience, if you’re a member of the workforce in Australia then it is crucial you understand what you are and aren’t entitled to in terms of superannuation. Employing casual employees can be greatly beneficial to businesses for a number of reasons, but it’s important to realise there are some businesses that don’t pay their casual employees superannuation. So it’s important to be aware of your superannuation and monitor it closely. This article will go through some of the main things a casual worker should be aware of about superannuation.

The table below displays a snapshot of super funds on Canstar’s database for workers aged 18-29, with a super balance between $0 and $55,000. Please note that these products are sorted by Star Rating (highest to lowest).

Please note that the performance information shown in the table is for the investment option used by Canstar in rating of the superannuation product.

Canstar considers the annual investment returns of a product’s default investment option, including default life-stage options. Where a product does not have a default investment option, annual returns for the investment option with the highest FUM and a 60-80% growth asset allocation are used.

The Superannuation Guarantee

The Superannuation Guarantee is a compulsory system of superannuation support for employees. It was first introduced in 1992 and has gone through multiple changes since then. At the time of writing, the SG scheme requires that employers make a compulsory 9.5% superannuation contribution to an eligible employee’s choice of super fund.

Superannuation for casual employees

Casual employees are covered under the SG scheme, and the rules are very similar to those that apply to permanent employees. The SG scheme applies to all employees, regardless of whether they are full-time, part-time or casually employed, and in many cases also applies to contractors and even temporary Australian residents.

For casual workers, the normal 9.5% SG rule applies if you earn more than $450 (before tax) in a single calendar month and you:

Are at least 18 years old; or

Work more than 30 hours per week if you’re under 18, or are employed as a domestic/private worker

Industries with the most casual employees

According to the Australian Bureau of Statistics Characteristics of Employment report from 2016, the following industries have the highest concentration of casual workers:

Hospitality: 79%

Food preparation assistants: 75%

Labourers: 58%

Sales support: 56

Sports and service workers: 55%

Farm and garden workers: 55%

Cleaners and laundry workers: 45%

Construction and mining workers: 45%

If you’re at least 18 and earn less than the threshold, or are under 18 or do work of a domestic or private nature and work less than 30 hours in a week, then you aren’t entitled to any superannuation and your employer does not have to make any contributions.

There are also several things you should be aware of when it comes to signing up for/receiving super:

Your employer should offer a choice of super funds

You should be presented with a standard choice form when choosing a super fund or starting a new job

Your employer should not attempt to sway or influence your choice of super fund

While many employers make your super contributions every fortnight, by law you must be paid at least quarterly, by the 28th day after the end of each quarter

Most super funds provide life insurance in every new super account set up in your name, either by default or as an optional inclusion. This is not free, and insurance premiums will be deducted from your super (you can boost, decrease and even cancel this cover). As a casual employee, consider whether you really need to be paying for life insurance at your current life stage. Canstar Research has found that paying for life insurance through super can take up to $244,000 off your final retirement figure (based on a starting balance of $30,000 and an annual income of $60,000).

There is also the issue of switching jobs and how this can impact your super. If you’ve moved between casual roles, then chances are you may have ended up with multiple different super funds which isn’t right for everyone, as your super balance could diminish without regular payments.

What if my employer isn’t paying me super?

It’s important to know your rights as an employee when it comes to super, and you should consider monitoring your super account and payslips to ensure you’re being paid correctly and on time.

If your employer isn’t paying the minimum amount of Super Guarantee by the correct date and amount, then you might consider raising the issue with them first. You can ask them how often they’re paying your super and which funds they’re paying it into. It’s entirely possible that there has been a mistake and that they’ve sent your super to the wrong account or that your new working hours haven’t been recorded.

The Australian Taxation Office

Never fall into the trap of assuming that you aren’t entitled to superannuation as a casual employee. While it might only seem like a few hundred dollars here and there at the moment, when you retire you’ll thank current you for ensuring your super is being paid correctly and on time.

Related

This advice is general and has not taken into account your objectives, financial situation, or needs. Consider whether this advice is right for you. Consider the product disclosure statement (PDS) before making any financial decision. For more information, read Canstar’s Financial Services and Credit Guide (FSCG).

Superannuation products displayed above that are not 'Sponsored' are sorted as referenced in the introductory text to the table. Canstar may receive a fee for referral of leads from these products. See How We Get Paid for further information. Products displayed above do not include all products/providers and may not include all features relevant to you. Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.

Performance information shown is for historical periods up to 31/12/2018 and investment options noted in the product information. Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the maximum applicable ongoing management fees and membership fees. Performance information is provided by Rainmaker Information Pty Ltd ABN 86 095 610 996 AFSL 461816 (www.rainmaker.com.au) which provides general information on superannuation. Performance data may not be available for some products. This is indicated in the tables by a note referring the user to the product provider, or by no performance information being shown.

Any advice on this page is general and has not taken into account your objectives, financial situation or needs and is not a recommendation for your particular circumstances. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. You may need financial advice from a qualified adviser.

Performance, fee and other information displayed in the table has been updated from time to time since the rating date and may not reflect the products as rated. The performance and fee information shown in the table is for the investment option used by Canstar in rating of the superannuation product.

Investment returns of superannuation products: Canstar considers the annual investment returns of a product’s default investment option, including the default life-stage option where applicable. Where a product does not have a default investment option, annual returns for the investment option with the highest funds under management (FUM) and a 60-80% growth asset allocation are used.

Annual cost includes administration fees and indirect costs (including the investment fee, performance fee where applicable, and any other indirect management costs). This cost is calculated based on the super balance specified and the investment option considered in the 2018 Superannuation Star Ratings, which is the default investment option (including default life-stage options). Where a product does not have a default investment option, annual fees for the investment option with the highest FUM and a 60-80% growth asset allocation are used.

The Superannuation Star Ratings in this table were awarded in March 2019. View the Canstar Superannuation Star Ratings Methodology and Report. These results are general advice only and not personal financial advice. Ratings are only one factor to take into account when deciding whether to make an investment. Consider the Product Disclosure Statement before making a purchase decision.

Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise. The results are general advice only and not personal product advice.

Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular product. The information has been prepared without taking into account your individual investment objectives, financial circumstances or needs. Before you decide whether or not to acquire a particular financial product you should assess whether it is appropriate for you in the light of your own personal circumstances, having regard to your own objectives, financial situation and needs. You may wish to obtain financial advice from a suitably qualified adviser before making any decision to acquire a financial product. Please refer to the product disclosure statement (PDS) and Canstar’s Financial Services and Credit Guide (FSCG) for more information, and read our detailed disclosure, important notes and liability disclaimer.

This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Statistics referenced on this page have been verified by Canstar Research. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917.